Oil Spill of Frade Field in Brazil -- Special Report

A large oil spill occurred during the drilling of an appraisal well in Frade Offshore Field. The well was closed as a part of precautionary suspension of drilling activities and Brazil's government slapped Chevron and Transocean with more then $10 billion fine for causing the spill.

Frade Field

Location

Northern Campos Basin - BR

Investment

3,000,000,000 USD

Announced

7/8/1999

Scope

Frade Field, which covers an area of 154 km2, is located 370 km (230 miles) offshore the coast of Rio de Janeiro in the Northern Campos Basin in Block BC-4. The heavy oil and gas field lies at a water depth of 1,128 m (3,700 feet) and is estimated to contain 200 m to 300 m barrels of recoverable oil. The field was discovered in 1986 by Petrobras, following which an appraisal well was drilled in 1989. Texaco drilled two more wells in 2001.

Field DevelopmentThe development scenario consists of a total of 19 wells; 12 horizontal production and 7 vertical injection wells. The production wells will utilize an open-hole gravel pack completion with gas lift, and will be tied back to a Floating, Production, Storage, and Offloading (FPSO) vessel. The FPSO will provide the capacity to process 100,000 barrels of oil per day, compress 106 million standard cubic feet of natural gas, and store 1.5 million barrels of oil. The subsea architecture consists of a series of production flowlines, gas lift and water injection pipelines, and umbilicals. The production wells will be paired together to provide pigging loops, while the water injection wells will be connected through a pipeline and umbilical loop. The gas lift pipelines and production umbilicals will be manifolded to supply up to 4 production wells. Surplus gas will be routed to shore via existing Petrobras pipelines in the area, while the processed oil will be sold on the world market, transported with conventional trading tankers.

Development Milestones

6/15/2006

The final investment decision concerning the Frade field development was completed.

3/26/2007

Japan Bank for International Cooperation signed a loan agreement totaling up to US$170 million for Frade field development.

12/31/2008

The Noble Leo Segerius drillship commenced drilling at the field.

6/20/2009

Chevron commenced crude oil production from the Frade field.

7/3/2009

SBM Offshore completed installation of the 'FPSO Frade'.

9/14/2010

Production from Frade field reached 65,000 bpd. Chevron completed six wells producing oil and two for injecting water back into the reservoir.

11/7/2011

An appraisal well encountered an unforeseen pressure spike during drilling operations. The wellhead was tightly sealed and the leak was blocked in four days. About 18 vessels were deployed to support the sheen remediation and well abandonment activities.

11/9/2011

The appraisal well was closed in at surface as a part of the precautionary suspension of drilling activities implemented by Chevron.

11/20/2011

Development drilling operations in the field remain suspended. Production from the field was maintained with volumes of approximately 79,000 barrels of oil equivalent per day.

11/22/2011

Brazil's government slapped Chevron with a $28 million fine for causing an offshore oil spill.

12/2/2011

Chevron was ordered by ANP to shut in one of its 11 production wells and four produced water injection wells at Frade joint-venture Floating Production-Storage and Offloading (FPSO) facility.

2/3/2012

Chevron conducted cementing of the well to stop the oil seep through the fissures which formed the oil sheen as part of the necessary work for the abandonment of the appraisal well drilled at the field. Chevron mobilized several vessels to deploy containment booms and to undertake skimming and washing techniques aimed at controlling the sheen as well.

3/3/2012

Chevron identified a small, new seep in another part of the Frade field. Chevron notified the authorities and immediately placed containment devices on the source. The total volume of this intermittent seep is approximately one barrel of oil. Chevron and its partners temporarily suspended production at the field as a precautionary measure while Chevron conduct a comprehensive technical analysis of the cause of this new seep and additional studies on the geological structure of the field.

3/15/2012

Chevron requested authorization for a temporary suspension of field production operations at the Frade field. Frade field produces a total of approximately 60,000 barrels per day (approximately 30,000 barrels net).

4/4/2012

A Brazilian federal prosecutor launched his second 20-billion-real ($10.9-billion) lawsuit against Chevron and driller Transocean, doubling the stakes against the companies as critics assailed him as overzealous.

8/6/2012

Chevron appealed against an injunction banning it and its drilling contractor Transocean Ltd from operating in Brazil while civil and criminal charges over an oil spill are judged.

8/29/2012

An injunction banning Chevron and Transocean from operating in Brazil was upheld by a panel of three Brazilian federal judges while charges over a November oil spill are being considered.

2/20/2013

A Brazilian judge dropped criminal charges against Chevron Corp, Transocean Ltd and 17 of their employees related to offshore oil spill in the field.

4/8/2013

Chevron Corp was authorized to restart production at the Frade field for a period of 12 months. Output from an additional two wells was also approved, but only for two months.

4/15/2013

Final documents allowing a restart were issued.

4/30/2013

Chevron was in the final stages of obtaining authorization from local oil regulators and should open the taps.

10/1/2013

A Brazilian federal judge dismissed a lawsuit against Chevron approving a negotiated settlement, a decision that closes a nearly two-year legal battle over an oil spill in November 2011. Brazilian prosecutors sought 40 billion reais ($18 billion) in damages from Chevron and offshore drilling contractor Transocean Ltd for a 3,600-barrel leak in the Frade field.

8/31/2014

The Frade field has doubled its oil production in the second quarter this year after ANP authorized the re-opening of six wells which were shutdown due to the oil spill in 2012. Since May, the production in Frade had only five wells producing around 15 thousand boed but the average production is around 26.7 thousand boed.

3/6/2015

Chevron Brasil has extended the contract for Skandi Salvador and IRM services for the remainder of 2015.

Chevron Corp plans to sign a five-year agreement to lease berthing space for its vessels from U.S. oil service company Edison Chouest Offshore, Chouest's head of Brazilian operations Ricardo Chagas sa...

In August 2004, Alliance Engineering worked in partnership with Intecsea to carry out the FEED studies for Frade FPSO.

Cargotec Oyj

MacGregor the wholly owned subsidiary of Cargotec was awarded a contract from SBM Offshore to provide a 485t plimsoll winch for Frade FPSO. The winch helps moor chains. It is also used for pulling in the risers. MacGREGOR also supplied a 45t supplementary winch, electro-hydraulic power supply and rotary platform.

Chevron Brasil Petroleo Ltda

Chevron Brasil Petroleo Ltda is the operator of Frade field.

DOF Subsea UK Ltd

DOF Subsea was awarded a three-year contract to supply an ROV vessel for survey and engineering services in the Frade field.

DOF Subsea UK Ltd

On 6 June 2012, DOF Subsea was awarded an extended contract from Chevron for Skandi Salvador and related services with one year from September 2012. The one-year extension has a value of approximately NOK 250 millions.
On 6 March 2015, Chevron Brasil has extended the contract for Skandi Salvador and IRM services for the remainder of 2015.

FMC Kongsberg Subsea- Western Hemisphere

Kongsberg was awarded a contract to process simulation for creating subsea dynamic simulation models. The models were used for training and operation at Frade field.

In August 2004, Intecsea was awarded a contract to carry out front-end engineering and design (FEED) studies for the Frade field. The work included cost estimation for flowlines, risers, FPSO hull and mooring and topsides facilities.

Lamprell Energy Ltd

Lamprell was subcontracted to supply seven topside processing modules, including test and second stage separation modules, main gas compression module, gas/flash gas compression module, and power generation module, as well as the manifold structure for Frade FPSO.

Noble Drilling Services Inc.

Noble Drilling Services Inc was awarded a contract for using Leo Segerius drillship in Frade field development.

SBM Offshore N.V.

On 26 April 2006, SBM Offshore was awarded a lump sum engineering, procurement, construction and installation (EPCI) contract covering the provision of Frade FPSO based on the conversion of the VLCC ‘Lu San’ from SBM inventory. The FPSO, moored by an internal turret accommodating 33 risers, will be fitted with topsides for the production of 100,000 barrels of oil, treatment and compression of 106 million standard cubic feet of gas and treatment and injection of 150,000 barrels of water per day.

Subsea 7

245 M

On 20 July 2006, Acergy S.A (Subsea 7 now) was awarded a deepwater installation contract by Chevron for the Frade field development. The contract is for the installation of a 41 kilometre flexible gas import/export pipeline between the Frade FPSO and the Roncador pipeline manifold, together with flexible risers and well control umbilicals, in water depths ranging between 100 to 1,200 metres.

Transocean Ltd.

385 M

In November 2005, Transocean was awarded a contract for using it's Sedco 706 semi-submersible drilling rig to carry out operations at Frade field.

Wellstream do Brasil Industria e Serviços Ltda

On 15 August 2006, Wellstream International was awarded a contract from Chevron Frade LLC for the supply of 130 kilometres of flowlines, risers and jumpers for the Frade project. This FPSO subsea development utilizes an all-flexible solution ranging from two-inch to eight-inch pipes including a 40 kilometre eight-inch gas export flowline.